/raid1/www/Hosts/bankrupt/TCRAP_Public/190107.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, January 7, 2019, Vol. 22, No. 004
Headlines
A U S T R A L I A
FORM DOCTORS: Second Creditors' Meeting Set for Jan. 14
GFIN PTY: Second Creditors' Meeting Set for Jan. 11
TS KITCHEN: First Creditors' Meeting Set for Jan. 11
C H I N A
MINISO GROUP: Parent Seeks to Put Canadian Store in Bankruptcy
I N D I A
A K LUMBERS: Ind-Ra Affirms BB- LT Issuer Rating, Outlook Stable
APOLLO POLYVINYL: CARE Lowers Rating on INR56.88cr Loan to D
CLASSICAL NATURAL: CARE Reaffirms B+ Rating on INR2.40cr Loan
DADA MOTORS: CRISIL Withdraws B+ Rating on INR23cr Cash Loan
ESSAR STEEL: NCLAT Asks NCLT to Expedite Decision
INDIA MEGA: CRISIL Lowers Rating on INR113.3cr Cash Loan to D
JINDAL WOOD: Ind-Ra Affirms BB- LT Issuer Rating, Outlook Stable
KUNDAN RICE: Ind-Ra Withdraws 'BB' Long Term Issuer Rating
M M BARELS: CARE Assigns B+ Rating to INR9.00cr LT Loan
MAMMOOS TRADERS: CRISIL Assigns B+ Rating to INR2.75cr Loan
MEEKA MACHINERY: CRISIL Reaffirms B+ Rating on INR4.25cr Loan
MITTAL FIBERS: Ind-Ra Affirms B+ LT Issuer Rating, Outlook Stable
NEELACHAL ISPAT: CARE Hikes Rating on INR543.01cr Loan to B+
PMD MILK: CRISIL Assigns B+ Rating to INR9.5cr Rupee Term Loan
PRIME AND SHINE: CRISIL Assigns B Rating to INR1cr Proposed Loan
PUNJAB METAL: Ind-Ra Affirms BB- LT Issuer Rating, Outlook Stable
R3 CROP: CARE Lowers Rating on INR26.60cr ST Loan to D
R.S. DREAMLAND: CRISIL Assigns B Rating to INR12cr Term Loan
SHREE VEERABHADRESHWARA: CARE Ups Rating on INR6cr Loan to B+
SHRI KEDARESHWAR: CARE Migrates D Rating to Not Cooperating
SHRIKRIPA POULTRY: CARE Assigns B+ Rating to INR6.0cr LT Loan
SHRIPROP DWELLERS: CRISIL Assigns D Rating to INR50cr NCD Ser. II
SPEEDY MULTIMODES: Ind-Ra Migrates BB- Rating to Non-Cooperating
SRI LAKSHMI: CRISIL Moves B+ Rating to Not Cooperating Category
SRI SENTHILKUMAR: CRISIL Assigns 'D' Rating to INR7cr Loan
STEEL EXCHANGE: CARE Migrates D Rating to Not Cooperating
UM GREEN: CARE Hikes Rating on INR17.50cr LT Loan to B+
UNITY FABTEXT: CRISIL Migrates D Rating to Not Cooperating
VEGGIECRAFT FOOD: CRISIL Lowers Rating on INR7.5cr Loan to D
VIGNESH SUPER: CRISIL Assigns B- Rating to INR7.08cr LT Loan
WILSON PRINTCITY: CRISIL Reaffirms B+ Rating on INR4cr Cash Loan
S I N G A P O R E
RED DOT: Exits Retail Electricity Market Amid Financial Woes
RHT HEALTH: Seeks 6-Month Extension to Maturity of $120MM Notes
- - - - -
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A U S T R A L I A
=================
FORM DOCTORS: Second Creditors' Meeting Set for Jan. 14
-------------------------------------------------------
A second meeting of creditors in the proceedings of Form Doctors
Pty Ltd has been set for Jan. 14, 2019, at 10:30 a.m. at the
offices of O'Brien Palmer, at Level 9, 66 Clarence Street, in
Sydney, NSW.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Jan. 11, 2019, at 4:00 p.m.
Daniel Frisken of O'Brien Palmer was appointed as administrator
of Form Doctors on Dec. 7, 2018.
GFIN PTY: Second Creditors' Meeting Set for Jan. 11
---------------------------------------------------
A second meeting of creditors in the proceedings of GFIN Pty
Limited has been set for Jan. 11, 2019, at 11:00 a.m. at the
offices of Pitcher Partners, at Level 22, MLC Centre, 19 Martin
Place, in Sydney, NSW.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Jan. 10, 2019, at 4:00 p.m.
Paul Gerard Weston of Pitcher Partners was appointed as
administrator of GFIN Pty on Oct. 3, 2018.
TS KITCHEN: First Creditors' Meeting Set for Jan. 11
----------------------------------------------------
A first meeting of the creditors in the proceedings of TS Kitchen
Pty Ltd will be held at the offices of Greengate Advisory, at
Suite 4.05, Level 4, 130 Pitt Street, in Sydney, NSW, at Jan. 11,
2019, at 10:00 a.m.
Patrick Loi of Greengate Advisory was appointed as administrator
of TS Kitchen on Jan. 3, 2018.
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C H I N A
=========
MINISO GROUP: Parent Seeks to Put Canadian Store in Bankruptcy
--------------------------------------------------------------
The Chinese parent companies of the international Miniso brand
(Miniso Group) have applied to the B.C. Supreme Court in
bankruptcy proceedings to have the Canadian licensee declared
bankrupt so that a court officer can operate the 50 Miniso stores
selling Miniso brand items in Canada. The court petition claims
the Miniso Group is owed $20 million for loans and stock shipped
to the Canadian operations.
The Miniso Group entered into a licensing and supply agreement
with B.C. registered Migu Investments Inc., Miniso Canada
Investments Inc. and Miniso Canada Store Inc. (licensee) in 2017.
Since then, the licensee has opened 50 stores across Canada with
plans to open 10 additional outlets.
In the bankruptcy petition, Miniso Group claims it is unpaid, as
are other creditors and the licensee has been misusing the Miniso
trademarks. If this continues, Miniso Group is concerned that
this could irreparably damage the Miniso Brand in Canada.
Miniso Group representatives say their overarching objective is
to preserve the Miniso brand in Canada for the benefit of the
public.
Miniso Group hopes that, by having an independent court officer
appointed oversee the Miniso Canada operations, it can
reinstitute supply and preserve the good name and reputation of
Miniso in Canada. Miniso Group will do whatever it takes to
ensure the Miniso Brand in Canada is preserved and the public are
well served through the Miniso outlets.
=========
I N D I A
=========
A K LUMBERS: Ind-Ra Affirms BB- LT Issuer Rating, Outlook Stable
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed A K Lumbers
Limited's (AKLL) Long-Term Issuer Rating at 'IND BB-'. The
Outlook is Stable. The instrument-wise rating actions are given
below:
-- INR45.00 mil. Fund-based limits affirmed with IND BB-/
Stable/IND A4+ rating; and
-- INR90.50 mil. Non-fund-based limits affirmed with IND A4+
rating.
Analytical Approach: Ind-Ra has taken a consolidated view of
AKLL, Jindal Wood Products Private Limited ('IND BB-'/Stable) and
Punjab Metal Works Private Limited ('IND BB-'/Stable) while
arriving at the ratings, given the strong legal and operational
linkages among them. All the three companies operate in the
similar line of business and have a common management.
KEY RATING DRIVERS
The affirmation reflects the group's continued medium scale of
operations as indicated by revenue of INR921.84 million in FY18
(FY17: INR1,003.16 million). The decline in revenue was owing to
a slowdown in the end-user industry. The EBITDA margins remained
modest, despite an improvement to 5.68% in FY18 (FY17: 4.24%) on
the back of a decrease in raw material prices. The group had a
return on capital employed of 7.27% in FY18.
The ratings also factor in the group's moderate-to-weak credit
metrics with interest coverage (operating EBITDA/gross interest
expenses) of 1.44x in FY18 (FY17: 1.29x) and net leverage (total
adjusted net debt/operating EBITDA) of 5.14x (4.69x). The
deterioration in net leverage was because of an increase in
short-term debt. However, the interest coverage improved due to
the improvement in EBITDA margins.
On a standalone basis, revenue was INR350.16 million in FY18
(FY17: INR359.27 million), EBITDA margin was 6.06% (4.58%),
interest coverage was 1.32x (1.27x) and net leverage was 4.48x
(5.51x).
However, the ratings are supported by the group's comfortable
liquidity position with around 73% average utilization of its
fund-based limits during the 12 months ended November 2018. The
group had a consolidated cash balance of INR5.29 million at FYE18
(FYE17: INR5.67 million).
The ratings are also supported by the group's promoter's
experience of more than two decades in the timber business.
RATING SENSITIVITIES
Negative: Deterioration in the operating margins, leading to a
decline in the credit metrics on a sustained basis will be
negative for the ratings.
Positive: A substantial growth in the revenue, while maintaining
or improving operating margins, leading to an improvement in the
credit metrics on a sustained basis will be positive for the
ratings.
COMPANY PROFILE
Incorporated in 2000, AKLL is engaged AKLL is promoted by Mr.
Atul Jindal and trades in and processes timber logs, mainly teak
and hard wood.
APOLLO POLYVINYL: CARE Lowers Rating on INR56.88cr Loan to D
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Apollo Polyvinyl Private Limited (APPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 56.88 CARE D; Issuer not cooperating;
Facilities Revised from CARE BB-; Positive
on the basis of best available
information
Short term Bank 13.00 CARE D; Issuer not cooperating;
Facilities Revised from CARE A4; on the
basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from APPL to monitor the rating
vide e-mail communications dated September 17, 2018; October 31,
2018; November 1, 2018; November 5, 2018; November 8, 2018;
November 15, 2018; November 30, 2018; December 3, 2018;
December 5, 2018; December 6, 2018; December 7, 2018; December
21, 2018; a letter dated December 26, 2018 and numerous phone
calls. However, despite CARE's repeated requests, the company
has not provided the requisite information for monitoring the
ratings. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating. The rating on APPL's bank facilities
will now be denoted as CARE D/CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings have been revised on account of delays in debt
servicing by the company ascertained by CARE as part of its
due diligence exercise.
Detailed description of the key rating drivers
Key Rating Weakness
CARE as part of its due diligence exercise interacts with various
stakeholders of the company including lenders to the company and
as part of this exercise has ascertained that there are delays in
debt servicing.
APPL was incorporated in 2011 by Mr. Sunil Kapoor for trading in
SAV (Self Adhesive Vinyl), PVC (Polyvinyl chloride) sheets, Flex,
Vinyl (front lit, back lit), Lamination films and Foam boards.
The promoters have been engaged in this business since 1996 under
other group companies and have presence in Bangalore, Cochin,
Cuttack, Hyderabad, Hosur, Kolkata, New Delhi, Noida, Sivakasi
and Vijayawada. APPL has its registered office in Chennai and has
sales offices at Chennai and Hosur.
CLASSICAL NATURAL: CARE Reaffirms B+ Rating on INR2.40cr Loan
-------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Classical Natural Stones (CNS), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 2.40 CARE B+; Stable Reaffirmed
Short-term Bank
Facilities 8.62 CARE A4 Reaffirmed
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of CNS continue to
remain constrained on account of vulnerability of margins to
fluctuation in the raw material prices and foreign exchange
rates, easy availability of substitute products in the
competitive industry with fortunes linked to cyclical real estate
sector and its constitution as a partnership concern. The
ratings, further, constrained on account of modest scale of
operations with moderate profitability and stressed liquidity
position.
The ratings, however, continue to derive strength from the
experienced partners with established presence in the natural
stone business and strategic location of manufacturing units with
close proximity to raw material sources. The ratings, further,
derive strength from moderate solvency position.
The ability of the firm to increase its scale of operations with
maintaining of profitability margins and improvement in solvency
position with better management of working capital is the key
rating sensitivity.
Detailed description of the key rating drivers
Key Rating Weakness
Modest scale of operations with moderate profitability: Total
Operating Income (TOI) of the firm has declined by 62.92% and
stood at 8.65 crore over FY17 owing to shut down stone mines due
to National Green Turbunal Court Decision for six months and GST
Impact. Despite decline in TOI, the profitability of the firm
stood comfortable with PBLIDT margin and PAT margin of 21.19% and
3.09% respectively mainly due to launch a new product of veneer
stone sheets. In FY18, PBILDT margin of the firm has increased by
1303 bps over FY17 mainly on account of lower material cost due
to veneer stone sheet. In line with increase in PBILDT margin,
PAT margin of the firm has also improved by 218 bps in FY18.
Further, GCA of the firm has increased by 581 bps over FY17 and
stood at INR 0.77 crore in FY18.
Stressed Liquidity Position: The liquidity position of the firm
stood stressed with almost full utilization of working capital
bank borrowings in last twelve month ended November 2018.
Further, the operating cycle of the firm stood elongated at 710
days in FY18 mainly on account of higher collection period and
inventory period due to shut down stone mines due GST Impact. As
on
March 31, 2018, the debtors stood high at INR15.03 crore
(Rs.14.19 crore as on March 31, 2017) out of which INR11.81 crore
(Rs. 10.53 crore) from its group concern, Earth Stone Global
(ESG). Due to it, liquidity ratios of the firm stood moderate
with current ratio and quick ratio of 1.81 times and 1.41 times
respectively with cash and bank balance of INR0.09 as on March
31, 2018.
Vulnerability of margins to fluctuation in raw material prices
and foreign exchange rates and easy availability of substitute
products: Different types of natural stones are the main raw
material used by CNS to produce various finished products. The
firm procures raw materials mainly from Rajasthan and Madhya
Pradesh. The profitability of the firm is vulnerable to any
adverse movement in raw material prices as the firm will not be
immediately able to pass on the increased price to its
customer and its elongated raw material inventory holding period.
CNS is exposed to foreign exchange fluctuation risk considering
that the firm generates entire income in foreign currency
and does not follow active hedging policy. For hedging of foreign
exchange fluctuation risk, the firm enters into forward
contracts partially. Therefore, any adverse movement in the
prices of foreign currency can negatively affect the
profitability margin of the firm to an extent of unhedged
portion. Further, there are various substitute products which are
easily available in the market and CNS faces competition from
same.
Fortunes linked to cyclical real estate sector: The products of
the firm find application in construction, real estate sector as
well as various allied activities and hence, fortunes of the firm
are lined to cyclical real estate sector. The risks associated
with real estate industry are - cyclical nature of business
(linked to economic cycle) and investments in real estate
worldwide have been driven based on the economic growth.
Key Rating Strength
Wide experience of the promoters in the natural stone industry:
The partners of the firm, Mr Hari Shankar Kanchhal, Mr Vikas
Kanchhal, Mr. Nitesh Kanchhal and Mr. Nakul Kanchhal have
wide experience of more than two decade and 5 years each
respectively in the natural stone industry through its group
concerns, Aggarwal Granimarmo (I) Pvt. Ltd., Ashok Marble
Industries, Classical Natural Stone Pvt. Ltd., Earth Stone World
Wide, Earth Stone Global, Image Craft India Pvt. Ltd. and Sand
Stone Impex.
Strategic location of manufacturing units with close proximity to
raw material sources: CNS manufacturing facility is located at
Jaipur, strategically located in one of the major minerals
producing region of India which makes it easier for the firm to
access its primary stones like granite, marble, veneer tiles,
decorative stones. It uses mainly natural stone to manufacture
its finished products. CNS has developed good business relations
with the mines owners resulting in benefits derived from lower
logistic cost, easy and timely availability and procurement of
raw materials at effective prices.
Improvement in solvency position: The capital structure of the
firm stood comfortable with an overall gearing of 0.98 times as
on March 31, 2018, improved from 1.51 times as on March 31, 2017
mainly on account of accretion of profits to reserves and
infusion of capital by the partners. Further, debt coverage
indicators of the firm stood weak with total debt to GCA of 16.16
times as on March 31, 2018, improved from 17.72 times as on
March 31, 2017 mainly on account of higher increase in GCA level
as well as decrease in total debt level. Further, interest
coverage ratio stood moderate at 1.70 times in FY18.
Jaipur (Rajasthan) based CNS was formed in October 2014 as a
partnership concern by Mr. Hari Shankar Kanchhal along with his
family members. The firm is engaged in manufacturing and export
of natural stones based products (like granite, marble, veneer
tiles, decorative stones). The firm has started its commercial
production from July 2015.The unit of the firm has well equipped
in-house processing facility to deliver optimum variety of
products and finishing according to customer specifications. The
products of the firm find applications in real estate as well as
various allied activities. It exports its product mainly to UK,
Norway, USA and Netherland etc.
DADA MOTORS: CRISIL Withdraws B+ Rating on INR23cr Cash Loan
------------------------------------------------------------
CRISIL has migrated the ratings on the bank facilities of Dada
Motors Private Limited (DMPL) to 'CRISIL B+/Stable Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 23 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Migrated from
'CRISIL B+/Stable'; Rating
Withdrawn)
Proposed Long Term 4 CRISIL B+/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Migrated from
'CRISIL B+/Stable'; Rating
Withdrawn)
CRISIL has been consistently following up with DMPL for obtaining
information through letters and emails dated December 11, 2018
and December 17, 2018 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of DMPL. This restricts CRISIL's
ability to take a forward looking view on the credit quality of
the entity. CRISIL believes that the information available for
DMPL is consistent with 'Scenario 1' outlined in the 'Framework
for Assessing Consistency of Information with CRISIL BB' rating
category or lower. Based on the last available information,
CRISIL has migrated the ratings on the bank facilities of DMPL to
'CRISIL B+/Stable Issuer not cooperating'.
CRISIL has withdrawn its rating on the bank facilities of DMPL on
the request of the company and after receiving no objection
certificate from the bank. The rating action is in-line with
CRISIL's policy on withdrawal of its rating on bank loan
facilities.
DMPL, established by Mr. Suraj Dada in 1992, is an authorized
dealer for the entire range of commercial and passenger vehicles
of Tata Motors Ltd and Jaguar Land Rover (JLR). The company has
surrendered its Fiat India Automobiles Ltd (FIAL) dealership in
2015-16. It has 11 showrooms (10 for TML and one for JLR) under
the 3S (sales, service, and spares) format in Punjab.
ESSAR STEEL: NCLAT Asks NCLT to Expedite Decision
-------------------------------------------------
BloombergQuint reports that the National Company Law Appellate
Tribunal on Jan. 3 asked the Ahmedabad bench of the National
Company Law Tribunal to expeditiously decide on the Essar Steel
insolvency case, where ArcelorMittal emerged as the highest
bidder.
Essar Steel lenders led by the State Bank of India had filed an
application with the tribunal seeking early approval of the
resolution plan, BloombergQuint says. The case has been running
for about 500 days as against a maximum of 270 days allowed for a
resolution under the Insolvency and Bankruptcy Code.
BloombergQuint relates that a two-member bench, headed by the
tribunal's Chairman Justice SJ Mukhopadhaya, asked the NCLT bench
to take an early decision in the matter as per the order passed
by the Supreme Court in this regard.
"We hope and trust that the adjudicating authority (NCLT) would
pass the final order, one or the other way, keeping in view the
decision of the Supreme Court. In case the adjudicating authority
do not pass any order in accordance with law by an early date, it
would be open to appellants to re-agitate the matter," the
appellate tribunal said, the report relays.
According to the report, the Committee of Essar Steel Creditors
had on Oct. 25 last year voted for accepting ArcelorMittal's
offer of upfront payment of INR42,000 crore to the lenders and an
additional INR8,000 crore towards capital expenditure.
A group of operational creditors and Essar Steel shareholders
have challenged the committee's decision. While operational
creditors say ArcelorMittal offer does not include clearing all
of their dues, Essar Steel shareholders want them to pay
INR54,389 crore to clear all outstanding dues, including of
operational and financial creditors, be considered.
BloombergQuint relates that senior advocate Gopal Subramanium
appearing for the committee, said that NCLT had adjourned the
matter twice without giving any reason. He also submitted that
shareholders of the corporate debtors (Essar Steel) have also
approached the NCLT, who has no "locus standi" in this matter
before the Ahmedabad bench and are delaying the matter.
According to Subramanium, it has become almost 500 days, when the
insolvency petition was admitted by the NCLT against Essar Steel
on Aug. 2, 2017. The matter is listed at NCLT Ahmedabad on Jan. 7
for next hearing, the report discloses.
The Supreme Court in its order passed in this matter on Oct. 4,
2018 asking both resolution applicants -- Russia's VTB bank
backed Numetal and ArcelorMittal -- to clear their defaults of
their related corporate debtor to be eligible for bidding,
recalls BloombergQuint.
The apex court had also said that the 270-day window for closing
a resolution plan as mandated by the Insolvency and Bankruptcy
Code would exclude any litigation in the tribunal or the Supreme
Court, adds BloombergQuint.
The committee has selected the INR50,000 crore bid from global
steel giant ArcelorMittal and is now before the NCLT, which is
the designated authority under the IBC code, for approval.
Essar Steel, which runs a 10-million-tonne steel mill in Gujarat,
owes over INR49,000 crore to over two dozen banks led by the SBI
and has been under the bankruptcy proceedings since last June,
BloombergQuint discloses. As per ArcelorMittal's resolution plan,
INR42,000 crore will be paid to the secured lenders, while an
additional INR8,000 crore will be pumped in as working capital.
BloombergQuint says the NCLT is also hearing petitions filed by
close to 30 operational creditors of Essar Steel, seeking
settlement of their dues from ArcelorMittal. These operational
creditors have moved the NCLT against the resolution plan offered
by the world's largest alloy maker ArcelorMittal as it denies
those operational creditors with over INR1 crore dues any
settlement.
About Essar Steel
Incorporated in 1976, Essar Steel India Ltd. is a part of the
Essar Group and is having 10 MTPA integrated steel manufacturing
facilities at Hazira, Gujarat and iron ore beneficiation and
pelletisation facilities in Paradeep, Odisha (12 mtpa) and Vizag,
Andhra Pradesh (8 mtpa). The company also owns and operates two
iron ore slurry pipelines -- one each in Odisha (Dabuna to
Paradip) and Andhra Pradesh (Kirandul-Vizag), which transport the
iron ore slurry from the beneficiation plant (located near the
iron ore mines in Dabuna and Kirandul) to the pellet plant
(located near the Paradip and Vizag ports). A large portion of
the iron ore pellets produced are intended for captive
consumption by ESIL's steel plant at Hazira for cost
optimization.
The National Company Law Tribunal (NCLT) - Ahmedabad Bench
admitted Essar Steel's insolvency case on Aug. 2, 2017.
Satish Kumar Gupta of Alvarez and Marsal India has been appointed
as interim resolution professional upon the suggestion of State
Bank of India (SBI).
Essar Steel owes more than INR45,000 crore to lenders, of which
INR31,671 crore had already been declared as non-performing as of
March 31, 2016, The Economic Times disclosed. The SBI-led
consortium of 22 creditors accounts for 93% of this amount. Essar
Steel owes $450.67 million to Standard Chartered Bank (SCB) in
debt.
INDIA MEGA: CRISIL Lowers Rating on INR113.3cr Cash Loan to D
-------------------------------------------------------------
CRISIL has downgraded the rating on the bank facilities of India
Mega Agro Anaj Limited (IMAAL) to 'CRISIL D/Issuer Not
Cooperating' from 'CRISIL BB+/Stable Issuer Not Cooperating' as
there are delays in the repayment of term loan in Bank of Baroda
and Axis Bank.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 113.3 CRISIL D (ISSUER NOT
COOPERATING; Downgraded
from 'CRISIL BB+/Stable
ISSUER NOT COOPERATING')
Proposed Long Term 12.75 CRISIL D (ISSUER NOT
Bank Loan Facility COOPERATING; Downgraded
from 'CRISIL BB+/Stable
ISSUER NOT COOPERATING')
Term Loan 23.95 CRISIL D (ISSUER NOT
COOPERATING; Downgraded
from 'CRISIL BB+/Stable
ISSUER NOT COOPERATING')
CRISIL has been consistently following up with IMAAL for
obtaining information through letters and emails dated Feb 28,
2018 and Aug 31, 2018 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company'.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of IMAAL, which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on IMAAL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'.
Based on the last available information, CRISIL has downgraded
the rating on the bank facilities of IMAAL to 'CRISIL D/Issuer
Not Cooperating' from 'CRISIL BB+/Stable Issuer Not Cooperating'
as there are delays in the repayment of term loan in Bank of
Baroda and Axis Bank.
Incorporated in June 2010 and promoted by Mr. Ajaykumar Baheti,
Mr. Radheshyam Maniyar, and their family, IMAAL is a mega food
processing company that mills rice, flour, and pulses, processes
cattle feed, and operates an oil mill and refinery. Operations at
the solvent extraction plant and biscuit manufacturing unit
commence its operation during the first-half of fiscal 2018.
Manufacturing and processing units are located in Nanded,
Maharashtra, spread over 50 acres.
JINDAL WOOD: Ind-Ra Affirms BB- LT Issuer Rating, Outlook Stable
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Jindal Wood
Products Private Limited's (JWPPL) Long-Term Issuer Rating at
'IND BB-'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR40 mil. Fund-based limits affirmed with IND BB-/Stable/
IND A4+ rating; and
-- INR170 mil. Non-fund-based limits affirmed with IND A4+
Rating.
Analytical Approach: Ind-Ra has taken a consolidated view of
JWPPL; A K Lumbers Limited ('IND BB-/Stable') and Punjab Metal
Works Private Limited ('IND BB-'/Stable) while arriving at the
ratings, given the strong legal and operational linkages among
them. All the three companies operate in the similar line of
business and have a common management.
KEY RATING DRIVERS
The affirmation reflects the group's continued medium scale of
operations as indicated by revenue of INR921.84 million in FY18
(FY17: INR1,003.16 million). The decline in revenue was owing to
a slowdown in the end-user industry. The EBITDA margins remained
modest, despite an improvement to 5.68% in FY18 (FY17: 4.24%) on
the back of a decrease in raw material prices. The group had a
return on capital employed of 7.27% in FY18.
The ratings also factor in the group's moderate-to-weak credit
metrics with interest coverage (operating EBITDA/gross interest
expenses) of 1.44x in FY18 (FY17: 1.29x) and net leverage (total
adjusted net debt/operating EBITDA) of 5.14x (4.69x). The
deterioration in net leverage was because of an increase in
short-term debt. However, the interest coverage improved due to
the improvement in EBITDA margins.
On a standalone basis, revenue was INR425.03 million in FY18
(FY17: INR482.90 million), EBITDA margin was 4.19% (3.52%),
interest coverage was 1.32x (1.28x) and net leverage was 6.68x
(4.27x).
However, the ratings are supported by the group's comfortable
liquidity position with around 73% average utilization of its
fund-based limits during the 12 months ended November 2018. The
group had a consolidated cash balance of INR5.29 million at FYE18
(FYE17: INR5.67 million).
The ratings are also supported by the group's promoter's
experience of more than two decades the in timber business.
RATING SENSITIVITIES
Negative: Deterioration in the operating margins, leading to a
decline in the credit metrics on a sustained basis will be
negative for the ratings.
Positive: A substantial growth in the revenue, while maintaining
or improving operating margins, leading to an improvement in the
credit metrics on a sustained basis will be positive for the
ratings.
COMPANY PROFILE
Incorporated in 1990, JWPPL is engaged in the trading and
processing of timber logs, mainly teak and hard wood.
KUNDAN RICE: Ind-Ra Withdraws 'BB' Long Term Issuer Rating
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Kundan Rice
Mills Limited's (KRML) Long-Term Issuer Rating of 'IND BB'. The
Outlook was Negative.
The instrument-wise rating actions are:
-- The IND BB rating on the INR450 mil. Fund-based limit are
withdrawn; and
-- The IND BB rating on the INR500 mil. Non-fund-based limit are
withdrawn.
KEY RATING DRIVERS
Ind-Ra is no longer required to maintain the ratings, as the
agency has received a no objection certificate from the rated
facilities' lenders. This is consistent with The Securities and
Exchange Board of India's circular dated March 31, 2017 for
credit rating agencies. Ind-Ra will no longer provide analytical
and rating coverage for KRML.
COMPANY PROFILE
KRML was incorporated in 1971 as a partnership firm and was
reconstituted as a company in 1995. The company operates via
three businesses; bullion trading, rice milling, and trading of
chemicals and polymers.
M M BARELS: CARE Assigns B+ Rating to INR9.00cr LT Loan
-------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of M M
Barels Industry (MMBI), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 9.00 CARE B+; Stable Assigned
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of MMBI are tempered
by lack of experience of partners in packaging industry, small
scale of operations and short track record of business, leveraged
capital structure and weak debt coverage indicators, working
capital intensive nature of operations, highly fragmented
industry with intense competition from other players, volatility
in raw material prices and partnership nature of constitution
with inherent risk of capital withdrawal. The ratings are,
however, underpinned by achievement of total operating income
during review period, satisfactory profitability margin, and
stable outlook for packaging industry.
Going forward, the ability of the firm to increase its scale of
operations and maintain the profitability margins and improve its
capital structure and debt coverage indicators while managing its
working capital requirement efficiently would be the key rating
sensitivities.
Detailed Description of the key rating drivers
Key Rating Weaknesses
Lack of experience of partners in packaging industry: MMBI is
promoted by Mr. Doraswamy Naidu, Mr. Praveen, Mr. Rajaram, Mr.
Purushotaman and other family members. Mr. Dorawamy Naidu has
more than two decade of experience in marketing. Mr. Rajaram has
one decade of experience in civil construction and Mr.
Purushotaman has more than three decades experience in State bank
of India and muthoot finance. However the partners have no prior
experience in manufacturing of mild steel drums and barrels.
Small scale of operation and short track record of business: MMBI
was established in the year 2014. However, the scale of
operations of the company marked by total operating income (TOI)
remained small at INR13.07 crore in FY17 coupled with low net
worth base of INR3.24 crore as on March 31, 2017 as compared to
other peers in the industry. Further the firm achieved total
operating income of INR 14 crore in FY18 (provisional).
Leveraged capital structure and weak debt coverage indicators:
The capital structure of the firm remained leveraged marked by
debt equity ratio stood at 1.08x as on March 31, 2017 due to
availment of term loan and vehicle loan. The overall gearing
ratio also stood at 2.01x as on March 31, 2017 due to high
utilization of working capital. The firm has weak debt coverage
indicators during the period. Total debt/GCA of the firm stood
9.22x in FY17 due to
increase in total debt at the back of the availment of term loan
and higher working capital utilisations, despite having
satisfactory cash accruals. The interest coverage ratio of the
firm stood at 1.97x in FY17.
Volatility in raw material price: The key raw materials used by
MMBI are iron and steel products, which constitute majorly of the
total cost of sales. The prices of these raw materials are
governed by global demand-supply dynamics and are volatile in
nature. Consequently, the company is exposed to raw material
price risk to the extent of loss in the inventory value as the
production process is long and the company has to hold good
amount of inventory.
Working capital intensive nature of operations: The firm operates
in working capital intensive nature of operations. However, the
operating cycle of the firm remained moderate during the review
period. The firm collects the payments from its customers within
1 month while availing similar credit period of one month from
its suppliers. The operating cycle days of the firm stood at 89
days in FY17. However, during its initial year of operations, the
firm maintained excess amount of raw material with an
anticipation of
getting order, but got the orders late due to which the inventory
days remained at higher side at 87 days in FY17. However, the
firm holds sufficient inventory levels to meet customer demand on
time. The average utilization of fund based working capital
limits of the company was 90% during the last 12 months period
ended August 31, 2018.
Highly fragmented industry with intense competition from large
number of players: The firm is engaged in manufacturing of mild
steel and barrels, which is highly fragmented industry due to
presence of large number of organized and unorganized players in
the industry. The firm faces huge competition from these players.
Partnership nature of constitution with inherent risk of capital
withdrawal: The firm being a partnership firm is exposed to
inherent risk of capital withdrawal by partners due its nature of
constitution. Any substantial withdrawals from capital account
would impact the net worth and thereby the gearing levels. The
partners infused the capital of INR 1.15 crore in FY17.
Key Rating Strengths
Achieved total operating income during the review period: The
total operating income of the firm stood at INR 13.07 crore in
FY17 during first full year of operations. In FY18 (Prov), the
firm achieved a total operating income of INR14 crore.
Satisfactory profitability margins during review period: The
profitability margin of the firm has been satisfactory during the
review period. While the PBILDT margin of the firm stood at
12.86% the PAT margin stood at 3.18% in FY17.
Stable outlook in packing industry: Steel is considered as one of
the most reliable and durable materials for the production of
industrial grade packaging containers. Steel drums are used for
packaging of liquids, semi-solids as well as powders. Steel drums
perform remarkably well in an extensive range of temperatures,
pressure, and humidity, while maintaining their structural
integrity irrespective of heat and flame, without any leakage or
spillage. Variety of steel drums are available in the market, the
closed or tight head type steel drums are typically used for
storing low viscosity fluids while open head type steel drums
are convenient for storing solids and hazardous liquids. Steel
drums continue to be a feasible option for storing and
transporting chemicals, lubricants, flammable & combustible
materials and more due to their fire resistant properties.
Steel drums prove to be a reliable solution to the bulk packaging
needs. These properties are anticipated to further propel
the demand for steel drums in the global steel drums market
during the forecast period.
Liquidity Analysis: The current ratio of the entity stood at 1.39
as on March 31, 2017 due to relatively higher current asset as
compared to current liabilities at the back of high inventories
and sundry debtors. The firm has cash and bank balances of INR
1.04 crore as on March 31, 2017, on and average the firm has 10%
of cash credit facility to meet the liquidity requirements.
Andhra Pradesh Based, M M Barels Industry (MMBI) was established
in October 29, 2014 by Mr.Doraswamy Naidu (Managing partner),
Mr.Rajaram Partner, Mr. Purushotaman (partner) along with family
members. The firm and commercial operation started in
December 17, 2015. MMBI is engaged in manufacturing of mild steel
drums and barrels of 200 Ltrs and 20 Ltrs capacity which are
mainly used by food processing companies, oil companies, Paint
and Ink industries etc. The current installed capacity for
manufacturing of Mild Steel Drums and Barrels is 10200 numbers
per month.
MAMMOOS TRADERS: CRISIL Assigns B+ Rating to INR2.75cr Loan
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of Mammoos Traders (MT).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Working
Capital Facility 2.75 CRISIL B+/Stable (Assigned)
Cash Credit 1.80 CRISIL B+/Stable (Assigned)
Letter of Credit 5.45 CRISIL A4 (Assigned)
The rating reflects modest scale and working capital intensive
operations. These rating weaknesses are partially offset by
extensive experience of the promoter in the industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale: The timber trading industry is marked by a large
number of traders in the local market and low value addition.
This has resulted in modest scale with operating income of
INR25.5 crore for 2017-18 coupled with modest profitability of
around of 3.6% for fiscal 2018.
* Working capital intensive operations: Operations are working
capital intensive as reflected in GCA of 145 days as on 31 March
2018 driven by receivables of over 111 days for the same period.
Strengths
* Extensive industry experience of promoter: The promoters have
around a decade of experience and have gained in-depth
understanding of the industry and relationships with suppliers
and customers in the region, which is likely to support the
business risk profile of MT over the medium term.
Outlook: Stable
CRISIL believes MT will continue to benefit from the extensive
industry experience of its promoters. The outlook may be revised
to 'Positive' in case of an increase in scale of operations and
improvement in the profitability, leading to improvement in the
financial risk profile. The outlook may be revised to 'Negative'
if revenue and profitability reduce, working capital requirement
increases, or there is large, debt-funded capital expenditure.
Liquidity
The firm has highly utilized its bank limit at over 80% for the
period ended December 2018. Firm is expected to generate adequate
cash accruals of about INR50 lakhs per annum as against annual
repayment obligations of INR20 lakhs.
MT, is a Ernakulam, Kerala based partnership firm and is involved
in trading of timber.
MEEKA MACHINERY: CRISIL Reaffirms B+ Rating on INR4.25cr Loan
-------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of Meeka Machinery Private Limited (MMPL).
The ratings reflect the company's modest, albeit increasing scale
of operations, large working capital requirement and average
financial risk profile. These weaknesses are partially offset by
the extensive experience of its promoters and their funding
support.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 4.00 CRISIL A4 (Reaffirmed)
Cash Credit 4.25 CRISIL B+/Stable (Reaffirmed)
Analytical Approach
For arriving at its ratings, CRISIL has treated unsecured loans
of INR2.4 crore from promoters as neither debt nor equity because
they are expected to remain in business over the medium term.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest, albeit increasing scale of operations: Revenue for
fiscal 2018 has increased, yet remains modest at INR10.4 crore.
While revenue is expected to increase further in fiscal 2019,
based on year-to-date performance and order book visibility,
intense competition will restrict scalability over the medium
term.
* Large working capital requirement: Operations are highly
working capital intensive, as reflected in high GCA of 364 days,
mainly on account of high work in progress inventory as the
turnaround time is generally 4-8 months. Debtors also remain
high due to delay in payment realization from the government
entities. While unsecured loans from the promoters also support
the operations, working capital management will remain a key
rating sensitivity factor over the medium term.
* Average financial risk profile: Networth and Total outside
liabilities to adjusted networth ratio remained at INR3.7 crore
and 1.88 times, respectively, as on March 31, 2018. Moreover,
debt protection metrics also remained weak with interest coverage
ratio of 1.3 times for fiscal 2018.
Strength
* Extensive experience of the promoters and their funding
support: The two-decade long experience of the promoters in the
industry and their strong relationship with customers should
continue to support business. Moreover, continued and funding
support of promoters through unsecured loans (outstanding at
INR2.4 crore as on March 31, 2018) will support financial risk
profile.
Outlook: Stable
CRISIL believes MMPL will benefit from the extensive experience
of its promoters and their funding support. The outlook may be
revised to 'Positive' if increase in revenue and profitability
leads to high cash accrual, or if efficient working capital
management strengthens financial risk profile. The outlook may be
revised to 'Negative' if low cash accrual or further stretch in
working capital cycle, or any large debt funded capital
expenditure weakens financial risk profile, especially liquidity.
Liquidity
* Moderate bank limit utilization: The company has cash credit
limit of INR4.25 crore, of which INR4.11 crore was utilized as on
Sep 30, 2018. Bank limit utilization average around 86% in past
12 months ended Sep 30, 2018 on the back of its working capital
intensive operations.
* No fixed long term debt obligations: Company does not have any
outstanding long term debt and hence there is no fixed term debt
obligation.
* Continued and incremental funding support from promoters in
form of unsecured loan: Promoters of MMPL have continued their
funding support through unsecured loans, outstanding at INR2.4
crore as on March 31, 2018, increasing from INR2.2 crore a year
earlier.
Incorporated in 1992, MMPL manufactures material handling
equipment such as cranes and hoists. It is promoted by Mr Dinesh
Garg and is currently managed by his son Mr Bhavin Garg. Its
manufacturing facility is located in Ahmedabad, Gujarat.
MITTAL FIBERS: Ind-Ra Affirms B+ LT Issuer Rating, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed M/s. Mittal
Fibers' (MF) Long-Term Issuer Rating at 'IND B+'. The Outlook is
Stable.
The instrument-wise rating actions are:
-- INR100 mil. (increased from INR60 mil.) Fund-based working
capital limits affirmed with IND B+/Stable rating; and
-- INR0.845 mil. (reduced from INR3.3 mil.) Long-term loans due
on July 2021 affirmed with IND B+/Stable rating.
KEY RATING DRIVERS
The ratings reflect MF's continued medium scale of operations, as
indicated by revenue of INR706 million in FY18 (FY17: INR691
million). The ROCE stood at 9% in FY18 (FY17:8%) and the EBITDA
margin remained modest at 2.5% (2.4%) because of fluctuations in
cotton prices and limited value-addition activity in the textile
value chain.
The ratings also factor in the company's weak credit metrics and
the proprietorship nature of the business. Interest coverage
(operating EBITDAR/gross interest expense) declined to 1.5x in
FY18 (FY17: 1.9x), and net financial leverage (total adjusted net
debt/operating EBITDAR) deteriorated to 9.3x (7.8x) due to the
enhancement of the fund-based limit.
The ratings benefit from MF's comfortable liquidity position,
with 23% utilization of fund-based limits during the 12 months
ended November 2018. Cash and cash equivalent stood at
INR13million in FY18 (FY17: INR8 million).
The ratings also continue to be supported by the promoter's
decade-long experience in the cotton ginning and pressing
industry.
RATING SENSITIVITIES
Negative: A further decline in the operating profitability,
leading to deterioration in the overall credit metrics, all on a
sustained basis, will be negative for the ratings.
Positive: A rise in the operating profitability, leading to an
improvement in the overall credit metrics, all on a sustained
basis, will be positive for the ratings.
COMPANY PROFILE
MF was established by Sanjay Agarwal in 2007. The firm is engaged
in the ginning and pressing of cotton in Shahada, Maharashtra. It
operates 36 ginning and one pressing machines. The firm also has
an oil mill. The proprietor has another firm that is engaged in a
similar business in Khetia, Madhya Pradesh.
NEELACHAL ISPAT: CARE Hikes Rating on INR543.01cr Loan to B+
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Neelachal Ispat Nigam Limited (NINL), as:
Amount
S.no Facilities (INR crore) Ratings
---- ---------- ----------- -------
i Long-term Bank 543.01 CARE B+; Stable Revised
Facilities from CARE D
(Term Loans)
ii Long-term Bank 160.00 CARE B+; Stable Revised
Facilities from CARE B-; Negative
(Fund Based)
iii Short-term Bank 252.05 CARE A4 Reaffirmed
Facilities
(Non-fund Based)
Detailed Rationale & Key Rating Drivers
The revision in the ratings of bank facility (Sr.no (i)) of NINL
takes into account the delay free track record of more than three
months in servicing of debt obligations by the company. The
revision in rating of bank facility (S.no (ii))/ reaffirmation of
bank facilities (S.no. (iii)) factors in the improvement in
operational and financial performance of the company in H1FY19
(refers to the period April 1 to September 31). The ratings
however continues to factor in the weak financial risk profile of
NINL marked by continued net losses during FY18 (refers to the
period April 1 to March 31) and H1FY19 (refers to the period
April 1 to September 31), subdued capital structure and debt
coverage indicators. The ratings also remain constrained by the
cyclicality inherent in the steel industry and NINL's exposure to
raw material price volatility.
However, the ratings continue to derive strength from the
experienced promoters and management of NINL, its semi-integrated
nature of operations and wide market reach by leveraging
marketing channel of MMTC.
Going forward, NINL's ability to profitably scale up the
operations while improving its financial risk profile shall and
continued support from the MMTC will be the key rating
sensitivities.
Detailed description of the key rating drivers
Key Rating Strengths
Experienced promoter and management: The company is promoted by
MMTC Ltd (49.78%) along with Industrial Promotion and Investment
Corporation of Orissa Ltd (15.29), NMDC Ltd (12.87), Orissa
Mining Corporation Ltd (12.32%) and MECON Ltd holding 0.86%
equity in the
company while the rest is held by body corporate. The company has
a board consisting of 14 directors who have considerable
experience in senior positions in PSUs and the government which
imparts stability and direction to the company.
Wide markets reach leveraging the marketing channel of MMTC: The
company has been the largest exporter of pig iron in India for
last 8 years and has access to a wide customer base in both the
domestic and export markets through the marketing channel of MMTC
Ltd which is the largest international trading company of India
and has been accorded the status of "Five Star Export House" by
the GOI. The company sells all its products to MMTC which further
sells the products in countries like Thailand, Korea, Indonesia,
Malaysia, Taiwan, Japan and China etc. and charges a commission
on the sales. In domestic market, the company sells its products
to the local steel manufacturers through MMTC only. The
widespread and established marketing reach of MMTC in the export
market provides a strong customer base for NINLs products also.
Integrated nature of operations: The company has integrated
nature of operations. With this company has a moderate level of
vertical integration with its own hot metal manufacturing
capacity, steel melting facility and captive power generation.
The company also has its own coke oven battery and sinter plant
which enables it to manufacture BF coke and sinter for captive
use.
Key Rating Weaknesses
Weak financial risk profile during FY18, though improvement
reported in H1FY19: During FY18 also the financial risk profile
of the company continued to remain weak with subdued total
operating income and declining profitability. The total operating
income of the company declined to INR 955 crore in FY18 from INR
1,288
crore in FY17. The PBILDT margin of the company declined to -
0.10% during FY18 from 0.09% in FY17 largely attributable to
lower realization of its products due to subdued demand. The
capital structure of the company has also further deteriorated
with increase in debt to INR 3,483 crore (PY: INR 3,225 crore)
and erosion of net worth on account of net losses. However, as
per H1FY19, the company has reported growth in its total
operating income and improvement in PBILDT margins. The company
has registered total operating income of INR 997.80 crore in
H1FY19 as against INR 674.68 crore in H1FY18. The PBILDT margin
of the company has improved to 4.85% in H1FY19 as against
negative of 4.75% in H1FY18.
Weak liquidity position: The liquidity profile of the company
though improved remained below average. The liquidity position is
however supported by improved operational performance during
H1FY19 and need based support provided by the promoters by
way of unsecured loans and working capital support. During FY19,
company is envisaging equity infusion by the promoters to meet
its long term working capital needs and other purposes which
shall aid the liquidity position of the company in near to medium
term.
Cyclicality of steel industry: The steel industry is sensitive to
the shifting business cycles, including changes in the general
economy, interest rates and seasonal changes in the demand and
supply conditions in the market. Apart from the demand-side
fluctuations, the highly capital-intensive nature of steel
projects along-with the inordinate delays in the completion
hinders the responsiveness of supply side to demand movements.
This results in several steel projects bunching-up and coming on
stream simultaneously leading to demand supply mismatches.
Neelachal Ispat Nigam Limited (NINL) was incorporated in 1982 to
set-up an Integrated Steel Plant (ISP) to undertake the
manufacture and sale of pig iron. Originally, the main promoters
were Industrial Promotion & Investment Corporation of Orissa
(IPICOL) and Orissa Sponge Iron Ltd (OSIL). Subsequently MMTC
Limited, a majority owned undertaking of Govt. of India, was
inducted as the main promoters since FY16 with equity share
holding of 49.78%.
NINL's manufacturing unit is located at Kalinga Nagar Industrial
complex, Dubri, Orissa having 1.1 Million Tonnes Per Annum (MTPA)
capacity blast furnace and supporting infrastructure like sinter
plant (1.7 MTPA), coke oven plant (0.88 MTPA), power plant (steam
and flue gas) (62.5MW) and billet manufacturing of 0.89 MTPA.
PMD MILK: CRISIL Assigns B+ Rating to INR9.5cr Rupee Term Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-
term bank facilities of PMD Milk and Foods (PMD).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 1.0 CRISIL B+/Stable (Assigned)
Rupee Term Loan 9.5 CRISIL B+/Stable (Assigned)
The rating reflects the firm's exposure to stabilisation of
operations and ramp up of revenue and profitability since the
operations are in nascent stage, project implementation risk and
average financial risk. These weaknesses are partially offset by
the partners' extensive experience in the milk processing
industry and their funding support.
Key Rating Drivers & Detailed Description
Weaknesses
* Nascent stage of operations: Recently, the firm has set up a
milk processing unit with capacity of 10000 liters per hour
(LPH). The operations are expected to start from January 2019.
Hence the quick ramp up of revenues and profitability will remain
a key driver. Further, the company is also in process of addition
of milk processing capacities which is expected to complete in
flag end of FY20 and hence timely completion of the same without
cost overrun is key rating monitorable.
* Average Financial Risk: With expected low networth of INR3.82
crore in Fiscal 2019 the financial risk profile is expected to be
average.
Strength
* Extensive experience of the partners: The partners' experience
of over three decades in the dairy industry and their keen grasp
of local market dynamics will support the business risk profile.
Further, the promoters have supported by infusing funds in the
form of equity.
Outlook: Stable
CRISIL believes PMD will continue to benefit from the extensive
experience of the partners. The outlook may be revised to
'Positive' if the firm stabilises and ramps up operations earlier
than expected, resulting in larger-than-expected cash accrual.
The outlook may be revised to 'Negative' if lower-than-expected
cash accrual or delays in proposed project execution weakens the
financial risk profile.
Liquidity
Liquidity is weak as the cash flows are expected to start from
January 2019. However, the partners have extended funds of INR4
crores hence support the liquidity.
Set up in February 2018, PMD is setting up a milk processing unit
and milk collection centres at the farm level in Baramati and a
dairy product processing unit at its distribution hub in Vasai.
The firm is promoted by Mr Hanmant Wamanrao Mohite, Mr Dilipkumar
Parmar, and Mr Santosh Dhavan.
PRIME AND SHINE: CRISIL Assigns B Rating to INR1cr Proposed Loan
----------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facility of Prime and Shine Trading Private Limited (PSTPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Fund-
Based Bank Limits 1 CRISIL B/Stable (Assigned)
The rating reflects a small scale of operations, negative cash
accrual and operating loss, a below-average financial risk
profile, large working capital requirement, and exposure to
intense competition. These weaknesses are partially offset by the
experience of the promoters in the diamond trading industry.
Key Rating Drivers & Detailed Description
Weakness
* Small scale of operations and operating loss: Revenue was
modest at INR14.27 crore in fiscal 2018 as against INR11.93 crore
in the previous fiscal. The increase was due to higher demand in
the overseas market. However, the EBIDTA (earnings before
interest, depreciation, tax, and amortisation) margin was a
negative 0.6% in fiscal 2018 (1.2% in the previous fiscal).
That's due to high employee cost and other related expenses. Net
cash accrual was a negative INR0.12 crore for fiscal 2018.
* Below-average financial risk profile: The networth was a
negative INR0.34 crore as on March 31, 2018, on account of net
losses over the years. The total outside liabilities to adjusted
networth ratio was high at negative 33.61 times as on this
date. Debt protection metrics were low at a negative 6.4 times in
fiscal 2018.
* Large working capital requirement: Gross current assets high
at245 days, due to stretched receivables of 225 days, as on March
31, 2018.
* Exposure to intense competition: The diamond trading industry
is highly fragmented, leading to low pricing flexibility and
hence constrained profitability. In the absence of a fixed
hedging policy, the operating margin also remains susceptible to
fluctuations in foreign exchange rates.
Strengths
* Experience of the promoters: A presence of around seven years
in the diamond industry has enabled the promoters to successfully
navigate business cycles and establish a strong relationship with
a diversified customer base across Singapore and China.
Outlook: Stable
CRISIL believes PSTPL is likely to have assured revenue
visibility over the medium term. The outlook may be revised to
'Positive' in case of substantial revenue and profitability and
an improved working capital cycle. The outlook may be revised to
'Negative' in case of low revenue or profitability.
Liquidity
* High bank limit utilisation: Bank limit utilization is expected
to be high going forward. Crisil believes that bank limit
utilization is expected to remain high on account of large
working capital requirement.
* Cash accrual insufficient to meet debt obligation: The cash
accrual is negative INR0.12 crore however, there is no debt
repayment obligations.
* Moderate current ratio: Current ratio is expected to be low at
0.93 times as on March 31, 2018.
PSTPL, based in West Bengal, was incorporated in 2011, promoted
by members of the Bothra family. The current directors are Mr
Ankit Jain, Ms Lata Kumari Bothra, and Ms Dipa Bothra. Operations
are managed by Mr Manish Bothra. The company exports cut and
polished diamonds to Singapore, and China.
PUNJAB METAL: Ind-Ra Affirms BB- LT Issuer Rating, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Punjab Metal
Works Private Limited's (PMWPL) Long-Term Issuer Rating at 'IND
BB-'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR20 mil. (reduced from INR30 mil.) Fund-based limits
affirmed with IND BB-/Stable/IND A4+ rating; and
-- INR35 mil. (reduced from INR50 mil.) Non-fund-based limits
affirmed with IND A4+ rating.
Analytical Approach: Ind-Ra has taken a consolidated view of
PMWPL, A K Lumbers Limited ('IND BB-'/Stable) and Jindal Wood
Products Private Limited ('IND BB-'/Stable) while arriving at the
ratings, given the strong legal and operational linkages among
them. All the three companies operate in the similar line of
business and have a common management.
KEY RATING DRIVERS
The affirmation reflects the group's continued medium scale of
operations as indicated by revenue of INR921.84 million in FY18
(FY17: INR1,003.16 million). The decline in revenue was owing to
a slowdown in the end-user industry. The EBITDA margins remained
modest, despite an improvement to 5.68% in FY18 (FY17: 4.24%) on
the back of a decrease in raw material prices. The group had a
return on capital employed of 7.27% in FY18.
The ratings also factor in the group's moderate-to-weak credit
metrics with interest coverage (operating EBITDA/gross interest
expenses) of 1.44x in FY18 (FY17: 1.29x) and net leverage (total
adjusted net debt/operating EBITDA) of 5.14x (4.69x). The
deterioration in net leverage was because of an increase in
short-term debt. However, the interest coverage improved due to
the improvement in EBITDA margins.
On a standalone basis, revenue was INR146.65 million in FY18
(FY17: INR160.99 million), EBITDA margin was 9.10% (5.69%),
interest coverage was 1.98x (1.37x) and net leverage was 3.72x
(3.37x).
However, the ratings are supported by the group's comfortable
liquidity position with around 73% average utilization of its
fund-based limits during the 12 months ended November 2018. The
group had a consolidated cash balance of INR5.29 million at FYE18
(FYE17: INR5.67 million).
The ratings are also supported by the group's promoter's
experience of more than two decades in the timber business.
RATING SENSITIVITIES
Negative: Deterioration in the operating margins, leading to a
decline in the credit metrics on a sustained basis will be
negative for the ratings.
Positive: A substantial growth in the revenue, while maintaining
or improving operating margins, leading to an improvement in the
credit metrics on a sustained basis will be positive for the
ratings.
COMPANY PROFILE
PMWPL, incorporated in 1975, was acquired by promoters of Jindal
Wood Products. The company processes plywood and veneer, and
trades timber logs, mainly hardwood.
R3 CROP: CARE Lowers Rating on INR26.60cr ST Loan to D
------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
R3 Crop Care Private Limited (R3CCPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 3.00 CARE D; Issuer not cooperating;
Facilities Revised from CARE BB- On the
basis of best available
information
Short Term Bank 26.60 CARE D; Issuer not cooperating;
Facilities Revised from CARE A4 On the
basis of best available
information
Detailed Rationale & Key Rating Drivers
The revision in the rating assigned to bank facilities of R3 Crop
Care Private Limited takes into consideration the delay in debt
servicing.
Ability of the company to establish a clear track record of
timely servicing of debt obligations with improvement in
liquidity position is key rating sensitivity.
Key Rating Weaknesses
On-going delay in debt servicing: As per the interaction with the
banker there are ongoing delays in the sales invoice discounting
facility. There is one and half month delay in regularizing the
supply bills
Incorporated in 1992 by Mr. Harish Trivedi, Mr. Rajiv Pandit and
Mr. Mukundray Bhatt, R3 Crop Care Private Limited (R3CCPL,
Erstwhile known as Rotam India Limited and later reconstituted
and renamed in 2013) is engaged into manufacturing, sale and
distribution of agrochemical active ingredients namely
insecticide and fungicide formulations. Its primary products
comprise of Chlorpyrifos (insecticide), Durmet (insecticide) and
Carbendazim (fungicide). It has its own formulation manufacturing
facility located at Vapi GIDC spread over 8500 sq. ft. and has a
total installed capacity of formulating 8100 metric tons of
chemicals per annum.
R.S. DREAMLAND: CRISIL Assigns B Rating to INR12cr Term Loan
------------------------------------------------------------
CRISIL has assigned rating of 'CRISIL B/Stable' to the bank
facilities of R.S. Dreamland Private Limited (RSDLPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Rupee Term Loan 12 CRISIL B/Stable (Assigned)
The rating reflects extensive experience of the promoters and
exposure to moderate project risk. These rating strengths are
partially offset by susceptibility to cyclicality in the real
estate industry.
Key Rating Drivers & Detailed Description
Weakness
* Susceptibility to cyclicality in the real estate industry: The
domestic real estate industry is marked by cyclicality, opaque
transactions, and intense fragmentation because of the presence
of a large number of regional players.
* Exposure to moderate project risk: RSDLPL is currently setting
up the residential project, called Empressia Elite in Raipur. The
project is almost 80% complete, and 69% of the units have been
booked so far, thus reflecting moderate project risk. The timely
completion of project and flow of advances for the same will
remain key monitorable.
Strengths
* Extensive experience of promoters: The firm will continue to
benefit from the longstanding presence of its promoters in Goa's
real estate segment, and their funding support.
Outlook: Stable
CRISIL believes RSDLPL will continue to benefit from the
extensive experience of its promoters. The outlook may be revised
to 'Positive' if more than expected sale realisation from ongoing
projects, leads to substantially large cash inflow. The outlook
may be revised to 'Negative' in case of any delay in execution of
projects or in receipt of customer advances, or if any large,
debt-funded project, weakens the financial risk profile.
Liquidity
The company has weak liquidity marked by tightly matched advances
against repayment obligation. The company is expected to receive
total advances INR26 crores from fiscal 2019 to fiscal 2021 in
comparison to balance construction cost of INR6-7 cr. and
repayment obligation of INR18-19 crores. The cash buffer ratio is
expected to be around 1.6 times. Any delay in receipt of
advances and slowdown in sale of units may impact the liquidity
and hence, will remain key monitorable.
RSDLPL was established in 2006 by the Mr Kushi Ram Kundnani and
is engaged in development of residential property in Raipur,
Chhattisgarh. The company is currently engaged in development of
a residential project of about 175000 sq ft in the Raipur,
Chhatisgarh.
SHREE VEERABHADRESHWARA: CARE Ups Rating on INR6cr Loan to B+
-------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Shree Veerabhadreshwara Rice Industries (SVRI), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 6.00 CARE B+; Stable Revised from
Facilities CARE B; Stable
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of SVRI continues to
be tempered by short track record of the firm with small scale of
operations, leveraged capital structure and weak debt coverage
indicators, working capital intensive nature of operations and
constitution of entity as partnership firm with inherent risk of
withdrawal of capital. The rating also factors in improvement in
profit margins and marginal improvement in interest coverage
ratio during review period. The rating is, however, underpinned
by the experience of promoter for more than two decades in rice
business and healthy demand outlook of rice.
Going forward, the ability of the firm to increase its scale of
operations, improve its profitability margins in competitive
environment, improve its capital structure and manage working
capital requirements efficiently would be the key rating
sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Short track record of the firm with small scale of operations:
SVRI was established in the year 2015 and the total operating
income stood at INR13.04 crore in FY18 with low net worth base of
INR2.35crore as on March 31, 2018. Apart, the firm has made a
profit of INR0.19 crore during the review period compared to net
losses of INR0.49 in FY17 due to absorption of fixed overhead.
Leveraged capital structure and weak debt coverage indicators
The capital structure of the firm remained leveraged during
review period. The overall gearing improved marginally from 3.58x
as on March 31, 2017 to 3.42x as on March 31, 2018 on back of
decrease in total debt level due to repayment of term loan and
lower working capital utilization. Total debt/GCA has improved
still stood weak at 9.44x in FY18 on account of decrease in total
debt levels and increase in cash profit due to increase in PBILDT
in absolute terms.
Working capital intensive nature of operations: The firm has
working capital intensive nature of operations due to high
inventory holding period. The operating cycle of the firm
increased to 170 days in FY18 as against 58 days in FY17 due to
increase in average inventory period. Paddy is the input for rice
processing units in India and it is harvested mainly at the end
of two major agricultural seasons Kharif (June to September) and
Rabi (November to April). The millers have to stock enough
paddies by the end of the each season as the price and quality of
paddy is better during the harvesting season. During this time,
the working capital requirements of the rice millers are
generally on the higher side. Majority of the firm's funds are
blocked in inventory. Moreover, the paddy is procured from the
farmers generally against cash payments or with a minimal credit
period of 30-45 days though the payable days are high at 71 days.
While the millers have to extend credit to the wholesalers and
distributors around 30 days resulting in high working capital
utilization reflecting working capital intensity of business. The
average utilization of fund based working capital limits of the
firm was around 90%-95% in the last 12 months period ended
November 30, 2018.
Constitution of entity as partnership firm with inherent risk of
withdrawal of capital: SVRI, being a partnership firm, is exposed
to inherent risk of the partner's capital being withdrawn at time
of personal contingency and firm being dissolved upon the
death/retirement/insolvency of the partners. Moreover,
partnership firm business has restricted avenues to raise capital
which could prove a hindrance to its growth. Further there is a
capital withdrawal of INR0.54 crore during review period.
Key Rating Strengths
Experience of promoter for more than two decades in rice
business: SVRI was promoted by Mr. S M Veeresh (Managing Partner)
and his family members. He has around 20 years of experience in
rice trading business. He is also a MBA graduate. Through his
experience in the rice trading business, he has established
healthy relationship with key suppliers, customers, local
farmers, dealers and also with the brokers facilitating the rice
business within the state.
Improvement in profit margins: The PBILDT Margin of the firm has
improved and stood at 12.99% in FY18 in spite of decrease in
total operating income due to the absorption of fixed overhead
and clearance of opening stock which resulted in low
manufacturing expenses. SVRI has earned profit during review
period as against net losses in FY17 and stood at 1.45% in FY18
due to increase in PBILDT in absolute terms and decrease in
depreciation cost.
Marginal improvement in interest coverage ratio: PBILDT interest
coverage marginally improved and stood at 2.02x in FY18 as
compared to 1.49x in FY17 on back of absolute increase in PBILDT
levels resulting in the absorption of increase in finance costs.
Total debt/GCA has improved and stood at 9.44x in FY18 as against
28.02x in FY17 on account of decrease in total debt levels and
increase in cash profit.
Healthy demand outlook of rice: Rice is consumed in large
quantity in India which provides favorable opportunity for the
rice millers and thus the demand is expected to remain healthy
over medium to long term. India is the second largest producer of
rice in the world after China and the largest producer and
exporter of basmati rice in the world. The rice industry in India
is broadly divided into two segments - basmati (drier and long
grained) and non-basmati (sticky and short grained). Demand of
Indian basmati rice has traditionally been export oriented where
the South India caters about one-fourth share of India's exports.
Liquidity Analysis: The current ratio of the company stood weak
at 0.73x as on March 31, 2018 mainly on account of high closing
inventory on the closing date of March 31, 2018. The cash and
bank balances stood at 1.87 lakhs as on March 31, 2018. The firm
did not have any current investments as on March 31, 2018.
Shree Veerabhadreshwara Rice Industries was established in 2015
as a partnership firm and promoted by Mr. S M Veeresh and Ms.
RoopaVeeresh (Spouse of S M Veeresh). SVRI is engaged in milling
and processing of rice. The rice milling unit of the firm is
located at Hanagawadi industrial Area, Harihar Taluk, and
Davangere district of Karnataka. The main raw material, paddy, is
directly procured from local farmers located in and around
Devangere District and the firm sells rice and other by-products
in the open markets of Karnataka.
SHRI KEDARESHWAR: CARE Migrates D Rating to Not Cooperating
-----------------------------------------------------------
CARE Ratings has migrated the rating on bank facility of Shri
Kedareshwar Builders & Developer private Limited to Issuer Not
Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 70.88 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from Shri Kedareshwar Builders
& Developer private Limited to monitor the ratings vide e-mail
communications dated October 1, 2018; October 16, 2018 &
November 14, 2018 and numerous phone calls. However, despite
CARE's repeated requests, the company has not provided the
requisite information for monitoring the ratings. In line with
the extant SEBI guidelines, CARE has reviewed the rating on the
basis of the publicly available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating. The
rating on SKBDPL bank facilities will now be denoted as CARE D;
ISSUER NOT COOPERATING considering ongoing delays in debt
servicing.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed Rationale & Key Rating Drivers
Key Rating Weakness
CARE as part of its due diligence exercise interacts with banker
of the company as part of this exercise has ascertained that
there are delays in debt servicing.
SKBDPL was incorporated on Nov. 17, 2014 by Madhav Deshpande and
Abhijeet Dudhane who are having more than two decades of
experience in the real estate business. The company is engaged in
the business of real estate development (residential and
commercial projects) mainly in Nagpur.
SHRIKRIPA POULTRY: CARE Assigns B+ Rating to INR6.0cr LT Loan
--------------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of
Shrikripa Poultry Feeds (SPF), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 6.00 CARE B+; Stable Assigned
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of SPF takes into
account modest scale of operations, thin profitability margins,
weak debt service coverage indicators, leveraged capital
structure, moderate liquidity position and working capital
intensive nature of its operations. The rating is further
constrained by the susceptibility of margins to fluctuations in
raw material prices as well as risks of disease (bird flu)
outbreaks and presence of firm in the fragmented industry.
The rating however, draws strength from the established track
record and experience of the promoters in poultry business and
positive demand outlook for the poultry sector.
Going forward, the ability of SPF to increase its scale of
operations while improving its profitability, solvency as well as
liquidity position and managing its working capital requirements
efficiently is the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating weaknesses
Modest scale of operations with low profitability margins: The
scale of operations of SPF stood modest as reflected by total
operating Income (TOI) of INR50.55 crore in FY18 (refers to the
period April 1 to March 31) and total capital employed of INR5.38
crore as on March 31, 2018, thus limiting financial flexibility
of the company in times of stress. Furthermore, though
profitability margin of SPF though improved over the years; stood
low with PBILDT margin in the range of 1.10% - 1.50% and PAT
margin remained below 1% during the last three financial years
ended in FY18.
Moderate liquidity position: Liquidity position of the entity
remained moderate marked by current ratio which stood at 1.21x
and quick ratio at 0.79x as on March 31, 2018. The operations of
the entity are working capital intensive with gross current asset
of 51 days for FY18 (Audited) with funds majorly blocked in
inventory. The working capital requirements of the company are
met by cash credit facility, the utilization of which remained
high.
Weak solvency position: SPF had a weak solvency position, as
reflected by its leveraged capital structure, on account of
higher reliance on external borrowings to support its increased
scale of operations. The debt protection indicators of SPF
remained weak, on account of low profitability and high gearing
levels.
Susceptibility to fluctuation in raw material prices: The major
raw material for companies engaged in poultry business is the
poultry feed which is made from soya and maize. Maize is
relatively grown in smaller quantity in India and being a rain-
fed crop, any failure in monsoon can materially impact the
harvest and prices of maize. In case of soybean, although there
is adequate availability, its prices remain volatile in relation
to movement in global prices and production. Hence, SPF's
profitability is vulnerable to the volatility associated with
poultry feed prices.
Vulnerability of the industry's performance to outbreaks of flu
and other diseases: Poultry industry is vulnerable to outbreaks
of diseases, like bird flu, extreme weather conditions and
contamination by pathogens. The outbreak of bird flu leads to a
fall in demand and consequent sharp crash in the egg/meat prices.
Diseases can also impact production of healthy chicks. These
avian flu outbreaks lead to a drastic fall in demand followed by
crash in poultry prices and also led to heavy loss to poultry
farmers as government agencies had to destroy the birds in
substantially high numbers to prevent an outbreak.
Presence in highly fragmented industry: The competitive nature of
poultry industry due to low entry barriers, high fragmentation
and the presence of a large number of players in the organized
and unorganized sector translate in inherent thin profitability
margins. The poultry industry is driven by regional demand and
supply because of transportation constraints and perishable
nature of the products. Low capital intensity and low entry
barriers facilitate easy entry of players leading to a large
unorganized sector.
Key Rating Strengths
Established track record and experience of the promoters in
poultry business: SPF is engaged in the business of poultry
farming since past two and half decades. The entity is currently
being managed by Mr. Sharad Narayanrao Bharsakale. Mr. Sharad has
gained an experience of around two and half decades through his
association with SPF and Amruta Hatcheries and Feeds (AHF), group
entity of SPF engaged in similar line of business. Hence,
promoter has an adequate acumen about various aspects of business
which is likely to benefit SPF in the long run.
Positive demand outlook for the poultry sector: As per The
Agricultural and Processed Food Products Export Development
Authority (APEDA) research report for FY18, poultry is one of the
fastest growing segments of the agricultural sector in India as
is backed by favorable socio-economic features. The healthy
growth registered by industry in past decade has made India into
fastest growing poultry market. Globally too the country has
emerged as one of the fastest growing poultry producer over last
decade and is currently fourth largest in volume terms. With
domestic per capita consumption still one of the lowest in the
world, industry has potential to grow further.
SPF was incorporated in 1992 as a Proprietorship Firm by Mr.
Sharad Narayanrao Bharsakale. SPF is engaged in poultry farming
business with an installed capacity of producing 35000 tonnes per
year of poultry feed.
SHRIPROP DWELLERS: CRISIL Assigns D Rating to INR50cr NCD Ser. II
-----------------------------------------------------------------
CRISIL has reaffirmed its rating on the non-convertible
debentures (NCDs) of Shriprop Dwellers Private Limited (Shriprop)
at 'CRISIL D'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Non Convertible 21.70 CRISIL D (Reaffirmed)
Debentures-
Series I LT
Non Convertible 50.00 CRISIL D (Reaffirmed)
Debentures-
Series II LT
The reaffirmation reflects continued delays by Shriprop in
servicing debt, given the weak liquidity. Additionally, the
company is exposed to project implementation risks and to
cyclicality inherent in the real estate sector. These weaknesses
are partially offset by Shriram Properties Private Limited's
(SPPL, the developer of Shriram Summitt) extensive experience in
real estate development.
Analytical Approach
CRISIL has evaluated the project risk for the entire Shriram
Summitt project and has used that as a surrogate for the project
risk of Shriprop. This is because Shriprop houses only units from
Shriram Summitt.
Key Rating Drivers & Detailed Description
* Delays in meeting debt obligation: Shriprop continues to delay
servicing debt on the non-convertible debentures (NCD) due to
weak liquidity. Earlier, due to weak liquidity, Shriprop had also
refinanced part of the Series I NCD and restructured the balance
portion by extending the maturity dates on two occasions. However
sales for the area under Shriprop have improved and collections
have gained momentum due to construction progress.
Weakness
* Exposure to project implementation risk: Shriram Summitt
project is still under construction, exposing Shriprop to project
implementation risks. The project is 84% completed with Phase I
and Phase II in the process of handover. However, most of the
units held by Shriprop are in Phase 3, where requisite approvals
have been received, but construction is still underway. Although
the project is being executed in phases, it remains exposed to
risks related to time and cost overruns.
* Susceptibility to cyclicality inherent in the real estate
sector
Being a real estate developer, Shriprop's credit risk profile is
exposed to risks and cyclicality inherent in the real estate
sector, resulting in fluctuations in cash inflows because of
volatility in realisations and saleability. In contrast, cash
outflows related to project completion and debt obligations, are
relatively fixed, which can lead to substantial cash flow
mismatches.
Strength
* Extensive experience of the developer in the real estate
industry: Shriram Summitt is being developed by SPPL, which is
the flagship company of Shriram group's real estate division.
SPPL has experience of over 20 years in real estate development
and the company has developed integrated townships, commercial
spaces and SEZs.
* Liquidity
There are delays in repayment due to weak liquidity. As of
November, 2018, Shriprop has sold 81% area. However, the
advances-to-booking ratio is moderate at around 47% on account of
slower construction in Phase III. Although Series II NCDs do not
have coupon payments, redemption with premium is due in fiscal
2020. This exposes Shriprop to refinancing risk given moderate
collections.
Shriprop, a special-purpose vehicle incorporated on August 18,
2014, is engaged in the real estate business, and holds units in
SPPL's Shriram Summitt project. Shriprop funded the purchase of
these units through inter-corporate deposits (ICDs) from Piramal
Estate Private Limited; the ICDs were subsequently replaced with
NCDs from Piramal Estate Pvt Ltd. The NCDs are to be serviced
from the proceeds of the sale of Shriprop's share of units in
Shriram Summitt.
Incorporated in 1995, SPPL is part of the Shriram group, and has
projects in Bengaluru, Chennai, Vishakhapatnam, Coimbatore,
Hyderabad and Kolkata. It develops residential and commercial
real estate projects, especially integrated townships, commercial
spaces and SEZs.
SPEEDY MULTIMODES: Ind-Ra Migrates BB- Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Speedy
Multimodes Limited's Long-Term Issuer Rating to the non-
cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND BB-(ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR5 mil. Fund-based working capital facility migrated
to non-cooperating category with IND BB- (ISSUER NOT
COOPERATING)/IND A4+ (ISSUER NOT COOPERATING) rating;
-- INR340 mil. Non-fund-based working capital facility migrated
to non-cooperating category with IND A4+ (ISSUER NOT
COOPERATING) rating; and
-- INR75 mil. Proposed non-fund-based working capital facility
migrated to non-cooperating category with Provisional IND A4+
(ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
January 5, 2018. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 1986 as Speedy Transport Private Limited, the
company initially provided transport solutions within Mumbai
port. In December 2005, the company was awarded a contract to
operate and manage as a CFS at JNPT for an initial period of 20
years and extension of another 10 years (20+10 years).
SRI LAKSHMI: CRISIL Moves B+ Rating to Not Cooperating Category
---------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Sri Lakshmi
Raw & Boiled Rice Mill (SLR) to 'CRISIL B+/Stable Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with SLR for obtaining
information through letters and emails dated October 29, 2018,
December 14, 2018 and December 19, 2018 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of SLR. Which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on SLR is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of SLR to 'CRISIL B+/Stable Issuer not cooperating'.
SLR mills and processes paddy into rice, rice bran, broken rice,
and husk. It is promoted by Mr. Muralidhar Reddy, and is based in
Nellore, Andhra Pradesh.
SRI SENTHILKUMAR: CRISIL Assigns 'D' Rating to INR7cr Loan
----------------------------------------------------------
CRISIL has assigned its 'CRISIL D/CRISIL D' ratings to the bank
facilities of Sri Senthilkumar Wood Industries (SSKWI). The
ratings reflect devolvement in letter of credit facility in the
recent months driven by stretched liquidity following large
working capital requirement.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3 CRISIL D (Assigned)
Letter of Credit 7 CRISIL D (Assigned)
The firm also has a modest scale of operations and weak financial
risk profile because of a small networth and a high gearing.
These weaknesses are partially offset by proprietor's experience
in the timber industry.
Key Rating Drivers & Detailed Description
Weaknesses:
* Modest scale of operations in highly fragmented industry: With
revenue of about INR17.6 crore in fiscal 2018, scale remains
small in the intensely competitive timber industry and will
continue to constrain profitability.
* Large working capital requirement: Gross current assets were
299 days as on March 31, 2018, due to sizeable inventory of 107
days and stretched receivables of 161 days. Inventory is large
owing to high lead time in procurement and seasonal availability
of timber.
* Weak financial risk profile: Networth was small at INR2.4 crore
as on March 31, 2018, due to low accretion to reserves, while
gearing was high at 2.97 times because of large working capital
debt. Weak operating margin led to average interest coverage
ratio of 1.39 times for fiscal 2018.
Strength:
* Proprietors extensive experience: Benefits from promoters'
experience of over four decades in the timber trading business
should continue to support business risk profile.
Liquidity:
The firm has devolved in the payment of its letter of credit due
to weak liquidity driven by working capital intensive operations.
The cash accrual is also modest at around INR0.11 crore and
INR0.15 crore per annum in fiscals 2019 and 2020. However, the
firm has no term debt. Fund-based limit of INR3 crore was
utilised at 95-100% on average over the 12 months ended September
2018 with few instances of overdrawal.
Established in 1978 as a proprietary concern in Krishnagiri,
Tamil Nadu, by Mr Krishnan, SSKWI processes and trades in timber.
Operations are managed by his son, Mr Senthilkumar.
STEEL EXCHANGE: CARE Migrates D Rating to Not Cooperating
---------------------------------------------------------
CARE Ratings has migrated the rating on bank facility of Steel
Exchange India Limited (SEIL) to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 575.42 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Long-term/Short 347.00 CARE D; Issuer not cooperating;
Term Bank Based on best available
Facilities Information
Detailed Rationale & Key Rating Drivers
CARE has been seeking for information from SEIL to monitor the
ratings vide-mail communications dated November 6, 2018,
November 21, 2018 and December 5, 2018 and numerous phone calls.
However, despite CARE's repeated requests, the company has not
provided the requisite information for monitoring the ratings. In
line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of best available information which however,
in CARE's opinion is not sufficient to arrive at a fair rating.
Further, Steel Exchange India Limited has not paid the
surveillance fees for the rating exercise as agreed to in its
Rating Agreement. The ratings on Steel Exchange India Limited
bank facilities and instruments will now be denoted as CARE
D/CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while
using the above rating(s).
The ratings take into account delays in debt servicing owing to
stretched liquidity position.
Detailed description of the key rating drivers
At the time of last rating on July 12, 2017, the following were
the rating strengths and weaknesses (Updated from the information
available from Stock Exchange).
Key Rating Weaknesses
Continued delays in debt servicing owing to weak liquidity
position: There are continued delays in debt servicing on account
of liquidity constraint. The company continued to incur cash
losses during FY18 which has led to stretched liquidity position
and consequently delays. The same have also been reported in
the audit financials of the company. The company had cash and
bank balance of INR 1.46 crore as on March 31, 2018.
Significant decline in operations: The total operating revenue
(TOI) for the company reduced by 26.06% to INR943.97 crore during
FY18 from INR1276.83 crore during FY17. Similarly, PBILDT for
FY18 has fallen from INR80.02 crore in FY17 to loss of INR8.60
crore in FY18. The company has reported net loss of INR170.13
crore during FY18 (as against net loss of INR157.16 crore during
FY17).
Continued leveraged capital structure with further deterioration:
The capital structure of the company continues to remain
leveraged. The overall gearing ratio deteriorated from 14.97x as
on March 31, 2017 to -10.53x as on March 31, 2018. The net worth
of the company has completely eroded as on March 31, 2018.
Working capital intensive nature of operations: SEIL operates in
a working capital intensive industry which is generally
associated with high working capital requirements. Operating
cycle of the company remained relatively stressed at 262 days in
FY18 as against 167 days in FY17, on account of high inventory
holding period. With subdued demand, the company has to offer
more credit period which resulted in increase in working capital
days.
Key Rating Strengths
Experienced and resourceful promoter group: SEIL is the flagship
company of the Vizag Profiles group of companies. The Chairman
and Managing director, Mr B Satish Kumar is well qualified and
possesses two decades of experience in various industries with
more than a decade of experience exclusively in the steel
industry. Mr Satish is assisted by a team of professionals who
are responsible for handling the key functional areas and have
experience in their respective fields for more than two decades.
Incorporated in February 1999, Steel Exchange India Ltd (SEIL) is
primarily engaged in the manufacturing of TMT bars apart from
billets, ingots and power generation. The company has a
manufacturing facilities for sponge iron (220,000 Tons Per Annum
(TPA)), billets (240,000 TPA), ingots (90,000 TPA), and TMT bars
(225,000 TPA). Apart from the above, the company also has wire
drawing unit with capacity of 30,000 TPA and a 12 MW gas-based
power plant. The company also deals in sale and purchase of steel
products through its trading division and is recognized as one of
the largest dealers for Rashtriya Ispat Nigam Limited. In
November 2014, Simhadri Power Limited after receipt of due
approvals from high court of Andhra Pradesh is merged with SEIL.
A 60MW thermal power plant is located within the premises of
SEIL.
The power plant has capacity to generate 20 MW from coal fines
and char which are residual of the sponge iron activity. The 16
MW of power by utilizing hot water gases from Sponge Iron Kiln,
which will be mixed along with coal. The residual power of 24 MW
is being generated by fresh coal as fuel.
UM GREEN: CARE Hikes Rating on INR17.50cr LT Loan to B+
-------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
UM Green Lighting Pvt. Ltd (UMGL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 17.50 CARE B+; Stable Revised
Facilities from CARE D
Long term/Short 11.50 CARE B+; Stable/CARE A4
term Bank Revised from CARE D
Facilities
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of UMGL factor in the
experience of the promoters with established track record of
operations, diversified product portfolio, healthy order book of
company and regularization of debt servicing. However, the
ratings are constrained due to lower profitability margins,
working capital intensive operations due to high receivables and
competitive nature of industry. Going forward the ability of the
company to manage its working capital requirement and improve on
the receivable position would be key rating sensitivities.
Detailed description of the key rating drivers
Key Rating strengths
Experienced promoters with established track record of
operations:
Incorporated in 2010, UMGL is a part of UM group companies. The
company is promoted by Mr Gaurav Mamik (Chairman and Director)
and Mr Sushant Chhabra (Director). The company has been engaged
in supply, installation, commissioning and testing of its
products to various state, PSU's and other semi-government
departments.
The company has executed more than 48 solar projects in past 3
years. Further, the company has reputed clientele including names
like EESL (Energy Efficiency Services Ltd), PEDA (Punjab Energy
Development Agency), UPNEDA (UP New and Renewable Energy Agency),
TEDA (Tamil Nadu Energy Development Agency) etc.
Diversified Product Portfolio
The company is engaged in the manufacturing and installation of
different products such as solar lighting systems, street
lighting system and LED lights etc. The company is primarily into
solar products' segment which comprises more than 66% of the
total revenues in FY18. However, with the recent advent of LED
lights and the additional thrust given by the Indian government,
the company is shifting its focus on the LED lights segment which
diversifies its product portfolio for FY19 and coming future
years.
Healthy order book
UMGLPL primarily caters to the government agencies like UPNEDA
(UP New & Renewable Energy Development Agency), PEDA (Punjab
Energy Development Agency), TEDA (Tamil Nadu Development Agency),
HAL (Hindustan Aeronautics Ltd), EESL (Energy Efficiency Services
Ltd) etc. which have been providing repeat orders to the company.
As on September 30, 2018, the company has a healthy order book of
INR49.71 crore with well-known clients.
Regularization of account of bank facilities
Due to the delay in recovery from receivable, there has been LC
devolvement and overdrawal in the cash credit account during
Mar'18. However post Mar'18, there has been recovery in the
receivable, leading to improvement in liquidity position of the
company and regularization of the LC and CC account. Due to the
improved liquidity position, UMHLPL doesn't have any overdrawal
of CC Limit and no instances of devolvement of LC limit in the
last 8 months ending Nov. 30, 2018.
Key Rating Weaknesses
Weak Financial Risk Profile with low profit margin and high
gearing: During FY18, the total operating income has remained
stable at INR53.03 Cr (PY: INR52.54 Cr) with the profitability
margins remained low at PBILDT margin of 7.85% (PY: 8.67%) and
PAT margin of 1.64% (PY: 1.93%) on account of increase in cost of
goods sold by about 11% in FY18. Also due to lower net-worth and
high debt, the overall has deteriorated to 2.23x as on March 31,
2018, as compared to 2.04 as on March 31, 2017. In H1FY19, the
company has generated INR26 Cr as its total operating income with
PAT margin of 1.72% (FY18:1.64%).
Working capital intensive nature of operations: The nature of
operations of the company are working capital intensive due to
the retention money held (10-20% of the Order value) with
clients, which is received after 5 years marked by a stretched
working capital cycle. Due to the working capital intensive
operations, the working capital utilization remain more than 95%
during the last 6 month ending Sep'18. During H1FY19, there has
been some recovery in the receivable leading to decline in total
receivable to INR56.70 Cr as on Sept. 30, 2018 as compared to
INR69.53 Cr as on March 31, 2018. However despite of the same,
the liquidity position continues to remain stretched. Therefore
going forward, it is imperative for the company to improve on its
liquidity
position and recover its debtors on timely basis.
Industry prospects and competitive nature of the industry: The
government of India is focused on providing universal access and
24*7 supply of electricity to the people of India. The power is
generated through two modes namely, renewable and non-renewable
resources. The renewable energy sector in India represents future
growth and change in the power generation sector in India. It
constitutes 17.5% of the total electricity generation capacity
operational in the country.
Incorporated in 2010, UM Green Lighting Pvt Ltd (UMGL) is a part
of UM group companies. The company is promoted by Mr Gaurav Mamik
(Chairman and Director) and Mr Sushant Chhabra (Director). The
company is engaged in manufacturing and installation of LED
lights, solar lights and installation of solar power plants. The
manufacturing facility of UMGL is located at Manesar, Gurgaon
with the capacity of about 100,000 units PA as on October 31,
2018. Top clients of the company are Osram, Halonix, Hero
Motorcorp, Nestle, PWD, UPNEDA (UP New & Renewable Energy
Development Agency), Director General of Police (J&K), BREDA
(Bihar Renewable Energy Agency), PEDA (Punjab Energy Development
Agency), etc.
Unitech Machines Ltd (UML) is the flagship company of UM group.
The group was promoted by Mr Virender Kumar Chhabra (MD of UML)
and Mr Sushant Chhabra (Director of UML). The company operates in
two segments- automobile division and infrastructure division.
UNITY FABTEXT: CRISIL Migrates D Rating to Not Cooperating
----------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Unity
Fabtext Industries Private Limited (UFIPL) to 'CRISIL D Issuer
not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 1.5 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
Letter of Credit 0.6 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
Proposed Long Term 1.9 CRISIL D (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
Term Loan 6.0 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with Unity Fabtext
Industries Private Limited (UFIPL) for obtaining information
through letters and emails dated September 07,2018 and October
30,2018 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of UFIPL. Which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on UFIPLis
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of UFIPLto 'CRISIL D Issuer not cooperating'.
For arriving at its rating, CRISIL has combined the business and
financial risk profiles of UFIPLand Unity Industries (UI). This
is because the two entities, together referred to as the Unity
group, have strong financial and operational linkages, and are
under a common management.
The Unity group, promoted by Mr Jagdish Karande, manufactures
non-woven products such as designer carpets, shoe liners,
industrial filters, and geo textiles; it also manufactures seat
covers, trim pads, moulded headliners, moulded floor mats, and
sun visors. UI was established in 1985, and UFIPL was
incorporated in 2012.
VEGGIECRAFT FOOD: CRISIL Lowers Rating on INR7.5cr Loan to D
------------------------------------------------------------
Due to inadequate information and in line with Securities and
Exchange Board of India guidelines, CRISIL had migrated its
ratings on the bank facilities of Veggiecraft Food Private
Limited (VFPL) to 'CRISIL B/Stable; Issuer not cooperating'.
However, management has started sharing information necessary for
a comprehensive review of the rating. Consequently, CRISIL is
downgraded the rating from 'CRISIL B/Stable; Issuer not
cooperating' to 'CRISIL D'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 1 CRISIL D (Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
Long Term Loan 7.5 CRISIL D (Downgraded from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
The migration reflects delay in payment of term loan obligations.
CRISIL's rating on the long term bank facilities of VFPL
continues to reflect the company's modest scale of operations in
the highly competitive food processing industry. These weaknesses
are partially offset by its promoters' experience in the fast-
moving consumer goods and food processing segments.
Key Rating Drivers & Detailed Description
Weaknesses
* Delay in payment of term debt obligations: VFPL has delayed
payment of term debt obligations.
* Modest scale of operations: Though the scale of operations has
improved, as reflected in revenue growth to INR18 crore in fiscal
2018 from INR2.83 crore two fiscals ago, it continues to be
modest in food processing industry.
Strength
* Experience of promoters in the industry: The experience of the
promoters in the industry and their understanding of the industry
dynamics has enabled revenue growth over the past two fiscals and
is expected to support the business over the medium term too.
Liquidity: Liquidity is weak, as indicated by close to 100%
utilization of the working capital bank limits. Net cash accrual
for fiscal 2019 is expected to be around INR1-1.2 crore which is
tightly matched against repayment obligation of around INR1.1
crore annually. Current ratio was comfortable at 1.27 times as on
March 31, 2018.
VFPL, promoted by Mr Chander Prakash Chabra, Ms Karuna Rawat, Mr
Param Dhanot, and Mr Kunal Malik in 2014, harvests, processes,
stores, packs, and cans mushrooms, and has a dairy plant in
Mathura, Uttar Pradesh.
VIGNESH SUPER: CRISIL Assigns B- Rating to INR7.08cr LT Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B-/Stable' rating to the long-
term bank facilities of Vignesh Super Speciality Hospitals
Private Limited (VSSHPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 7.08 CRISIL B-/Stable (Assigned)
Proposed Long Term
Bank Loan Facility 2.92 CRISIL B-/Stable (Assigned)
The ratings reflects below average financial risk profile marked
by its modest net worth, high gearing, and weak debt protection
metrics and geographically concentrated operations in the highly
fragmented and competitive healthcare segment. These rating
weaknesses are partially offset by the the extensive experience
of its promoters in the healthcare industry.
Analytical Approach
Unsecured loans of INR1.9 crores are treated as debt as they are
not subordinated to bank debt and are subject to withdrawals.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations and geographical concentration:
VSSHPL's business risk profile is constrained on account of its
modest scale of operations as reflected in its small revenues.
The geographical concentration of VSSHPL renders it vulnerable to
entry of any big player in the region. The image-sensitive nature
of the healthcare industry further aggravates the risk of being
in a single location.
* Below average financial risk profile: Company's financial risk
profile is marked by modest net worth, high gearing and weak debt
protection metrics. Gearing is expected to remain high on account
of small scale of operation, hence small accretion to reserves.
Debt protection metrics are below average and are expected to
remain so over the medium term.
Strengths:
* Long experience of PHPL's promoters in the healthcare industry
VSSHPL's promoter and managing director Mr. Dr. B.S. B.N.
Choudhary has more than one decade of experience in the health
care industry.
Outlook: Stable
CRISIL believes that VSSHPL will benefit over the medium term
from its promoters' extensive industry experience. The outlook
may be revised to 'Positive' in case of sustainable increase in
the company's revenue and profitability and substantial
improvement in capital structure through equity infusion,
resulting in improvement in its business risk and financial risk
profile. Conversely, the outlook may be revised to 'Negative' if
VSSHPL's financial risk profile weakens further because of low
cash accruals or large debt-funded capital expenditure.
Liquidity
VSSHPL has weak liquidity marked by marginal cash and cash
equivalents of INR0.24 cr as on March 31, 2018 and expected cash
accruals of around INR0.23 cr and INR0.34 cr per annum in FY19
and FY20 respectively. The company does not have fund based
limits. The company has long term repayment obligations around
INR0.50 cr each in FY19 and FY20, tightly matched against the
expected internal accruals. The company does not have any working
capital limit. There are major debt funded capex plans over the
medium term; capex would be done primarily by way of equity.
Promoters have supported the company with unsecured loans of
INR1.90 cr, which is not subordinated to debt, and are expected
to continue to do so as and when required.
Incorporated in 2008, Vijayawada-based (Andhra Pradesh) VSSHPL
owns and has rented out its hospital which has a capacity of 80
beds of these average occupancy of 56 beds. VSSHPL is promoted
and managed by Mr. Dr. B.S. B.N. Choudary.
WILSON PRINTCITY: CRISIL Reaffirms B+ Rating on INR4cr Cash Loan
----------------------------------------------------------------
CRISIL has reaffirmed its ratings on the bank facilities of
Wilson Printcity Private Limited (WPPL) at 'CRISIL
B+/Stable/CRISIL A4'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 1 CRISIL A4 (Reaffirmed)
Cash Credit 4 CRISIL B+/Stable (Reaffirmed)
Long Term Loan 1.8 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 0.2 CRISIL B+/Stable (Reaffirmed)
CRISIL rating on the long-term bank facilities of WPPL continues
to reflect WPPL's large working capital requirement and small
scale of operations. These weaknesses are partially offset by the
industry experience of its promoters, and its comfortable
financial risk profile.
Key Rating Drivers & Detailed Description
Weakness
* Small scale of operations and tender based nature of business:
Operating income increased to INR34 cr in FY18 from INR15 cr in
FY17 due to an additional order worth INR15 cr from its existing
client 'Government of Gujrat'. Further in FY19 WPPL is expected
to achieve turnover of around INR25 cr. Scale of operations
continues to be small , Intense competition and tender based
nature of business continues to constrain scalability.
* Working capital intensity in operations: Working capital
requirement remain large: gross current assets and debtors were
sizeable at 283 days and 249 days, respectively, as of March
2018, owing to delayed payments by customers.
Strengths
* Promoter's extensive experience: Benefits from the promoters'
experience of over three decades in the printing press industry,
and focus on service quality, innovation, and timely delivery
have ensured repeat orders. These benefits should continue to
support the business.
* Comfortable financial profile: Capital structure has remained
comfortable with gearing of 1.12 time as on March 2018. Debt
protection metrics are adequate, too, with interest coverage and
net cash accrual to total debt ratios of 3.4 times and 0.21 time,
respectively, in fiscal 2018.
Outlook: Stable
CRISIL believes WPPL will continue to benefit over the medium
term from the industry experience of its promoters and its
healthy debt protection metrics. The outlook may be revised to
'Positive' if the company reports strong accrual, backed by
significant increase in revenue or operating margin, and
efficient working capital management. The outlook may be revised
to 'Negative' if decline in accrual, any large debt-funded
capital expenditure, or increase in working capital requirement,
weakens financial risk profile.
Liquidity Risk Profile:
Bank limit utilisation is moderately high around 85 percent for
the past twelve months ended August 31, 2018. CRISIL believes
that bank limit utilization is expected to remain moderate on
account large working capital requirement. Cash accrual are
expected to be around INR2.4 cr and 2.9 cr against the repayment
obligations of INR2.9 cr and 2.3 cr receptively in FY19 & FY20.
Cash accrual are expected to be insufficient against term debt
obligation in FY19. WPPL is expected to meet the repayments
through creditors and cushion in bank limits .Current ratio is
moderate at 1.3 times as on March 31, 2018.
WPPL, incorporated in 1995, is promoted by the Ahmedabad-based Mr
Gunvantrail Dave and his family. The company provides printing
services. The printing press is at Sanand.
=================
S I N G A P O R E
=================
RED DOT: Exits Retail Electricity Market Amid Financial Woes
------------------------------------------------------------
Channel News Asia reports that Red Dot Power has decided to stop
providing retail electricity services, and is exiting the market
with effect from Jan. 4.
In a notice on its website dated Jan. 3, the company cited
financial challenges for its decision, CNA relates.
"It has been a financially challenging period for Red Dot Power
and we have decided to cease serving all our customers for retail
electricity services," it said, the report relays.
According to the report, the company said customers' accounts
will remain under Red Dot until Jan. 6, and will then be
transferred to SP Group the next day with "no disruption to your
electricity supply."
Red Dot was among retailers that participated in last April's
pilot launch of the Open Electricity Market -- an initiative to
open up the power market to competition, the report says.
It was one of the retailers that opted out of a nationwide launch
last November, which saw the initiative being rolled out across
Singapore in phases, says CNA.
With its exit, there are still more than 10 electricity retailers
in Singapore, the report notes.
Those who want to switch to another retailer can do so after the
transfer of their account to SP Group, Red Dot, as cited by CNA,
said.
The report relates that customers will be not be required to pay
any early contract termination charges to Red Dot, and security
deposits will also be held by SP Group after the account
transfer.
The company added that it was working closely with the Energy
Market Authority and SP Group to ensure a smooth transfer, the
report adds.
It said it would continue to operate in other business segments
such as solar, battery storage and electric vehicle charging
stations.
RHT HEALTH: Seeks 6-Month Extension to Maturity of $120MM Notes
---------------------------------------------------------------
The Strait Times reports that RHT Health Trust is asking holders
of $120 million of 4.5 per cent notes due Jan. 22, 2019, for a
six-month extension to the notes' maturity date to accommodate
delays in its asset sale to Fortis Healthcare.
RHT Health Trust, a business trust that operates India-based
healthcare assets, is seeking noteholders' consent to push the
maturity date to July 22, 2019, with redemption at maturity set
at 100.45 per cent of the principal amount. Consenting
noteholders will receive a one-time 1 per cent consent fee.
According to the report, repayment of the notes was to be funded
by the sale of RHT Health Trust assets to Fortis Healthcare.
However, due to a delay in the buyout of Fortis Healthcare by IHH
Healthcare Bhd, the purchase agreement between Fortis and RHT
Health Trust would consequently be delayed, with the long-stop
date now set at March 26, 2019. As the asset sale to Fortis is
unlikely to be completed by Jan 22, RHT Health Trust is seeking
to extend the notes' maturity.
The meeting to seek noteholders' consent will take place on
Jan. 21, the report discloses. DBS and UOB are acting as joint
solicitation agents, the Strait Times adds.
*********
Tuesday's edition of the TCR-AP delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-AP editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Tuesday
Bond Pricing table is compiled on the Friday prior to
publication. Prices reported are not intended to reflect actual
trades. Prices for actual trades are probably different. Our
objective is to share information, not make markets in publicly
traded securities. Nothing in the TCR-AP constitutes an offer
or solicitation to buy or sell any security of any kind. It is
likely that some entity affiliated with a TCR-AP editor holds
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about which we report.
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Friday's edition of the TCR-AP features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical
cost net of depreciation may understate the true value of a
firm's assets. A company may establish reserves on its balance
sheet for liabilities that may never materialize. The prices at
which equity securities trade in public market are determined by
more than a balance sheet solvency test.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
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